India asks OPEC to stop charging premium prices for Asian markets

Oil Minister Dharmendra Pradhan has asked the Organisation of the Petroleum Exporting Countries (OPEC) to stop charging a premium from its Asian buyers, saying that oil producers should not subsidise others at the expense of countries like India.

As per a PTI report, Pradhan said OPEC should work towards "responsible price", which would allow major consuming countries to provide energy to common people. He was speaking at the second high-level meeting of the OPEC-India Energy Dialogue in Vienna yesterday.

In the past, India's Mani Shankar Aiyar had raised the issue of OPEC members charging a premium from Asian buyers but the cartel has refused to act on the issue. OPEC, Pradhan said, should treat Asian markets as primary markets. "Its strategy of incentivising western markets in the past did not result in retaining those markets."

Stating that OPEC member countries are in the business of selling oil and not subsidising it, he said, "Don't subsidise others at our expense."

 
The oil cartel, which accounts for over 40 percent of the world's oil supplies, should work towards responsible price, he said, adding that dialogue between producers and consumers helps better understand each other's prescpective.

India, according to the minister, is growing at over 7 percent and the growth rate in the energy sector is 7-8 percent, which is twice that of many developed markets. Due to the sharp increase in demand, India is increasing crude oil imports and also its refining capacity.

"Today, our annual refining capacity is 235 million tonnes of which 194 million tonnes of products are consumed domestically, while the rest is exported. At the same time, our energy consumption is expected to double in the next 15 years.

"We are in fact net exporters of petrol, naptha, jet fuel and gas oil. We are in the process of increasing our refining capacity to around 310 million tonnes by 2023. India is fast becoming a refinery hub," he said.

Images: PIB